McAlpine Replaced as Magna CEO

Magna Entertainment Corp. announced Tuesday that Thomas W. Hodgson has been appointed chief executive officer, replacing Jim McAlpine. The release said McAlpine has been appointed vice chairman of corporate development for the racetrack operating company and will also continue to serve as a member of the MEC executive management committee.

Other members of the executive management committee are Dennis Mills, Don Amos, Joe DeFrancis, and Ron Charles, with Hodgson serving as chairman.

According to the release, Hodgson joined the board of directors of MI Developments Inc., MEC's parent company, in September 2004, and for the past several months has been working as a consultant to MID with respect to MEC. Hodgson has resigned from the MID board to accept his appointment as MEC's CEO. Previously, Hodgson was president of Strategic Analysis Corporation and has held senior positions with Canadian financial institutions and United Kingdom companies since 1979, MEC said.

Among the companies where Hodgson has served are the Canadian Imperial Bank of Commerce, Canada Permanent Trust Co. Central Guaranty Trust, where he served as president and CEO, Marathon Asset Management Inc., where he served as president, and GlobalNetFinancial.com, where he served as CEO.

Last month, Magna reported that it continued to lose money during the fourth quarter and the year 2004, although the losses narrowed from the previous reporting periods.

Magna reported revenues rose 3.2% to $731.6 million in 2004, compared with $708.9 million in 2003, with a net loss of $95.6 million ($0.89 per share) in 2004, compared with a $105 million ($0.98 per share) loss in 2003. During the fourth quarter 2004, revenues of $138.9 million represented a decline from the $146 million figure for the same period in 2003; the net fourth-quarter loss was $40.9 million, compared with a $103.16 million loss in the same period in 2003. The company noted that fourth-quarter revenues for 2003 included the $8-million benefit from the sale of real estate at Golden Gate Fields in California.

MEC chairman and prominent horse owner Frank Stronach said the latest management changes are aimed at focusing the company on its finances.

"MEC remains committed to its strong vision and leadership position within the horseracing industry," Stronach said. "However, at this point in our development, we need to focus on financial and operating discipline at many of our operations. Our entire board, including Jim McAlpine, strongly supports Tom's appointment as well as the need for improved financial discipline throughout the company. Tom brings a very strong financial background to MEC and he, together with the other members of the MEC executive management committee, will ensure that MEC maintains that focus. On behalf of the board of cirectors of MEC, I would like to thank Jim for his hard work over the past several years in launching MEC and helping to position it for the next stage in its development. We look forward to Jim continuing to contribute to MEC in his new role."

"Over the past several years, MEC acquired and developed the racing content and technology necessary to become a truly global player in the pari-mutuel industry," Hogdson said. "In order to ensure that MEC remains well-positioned to capitalize on industry opportunities, including alternative gaming and international opportunities, we need to operate with financial discipline."

"Over the past five years, MEC people have worked diligently to make MEC the company that it is today, a company filled with opportunity," McAlpine said. "I have enjoyed leading this dynamic group and look forward to making a continuing contribution by supporting Frank, Tom and the executive management committee to see MEC achieve its full potential."